An 8.5% Yield With Room To Run

Last time some investors asked about the current opportunities in preferred shares. The preferred shares for mortgage REITs are looking great. Prices got hammered as credit spreads opened due to recessionary risk, but the risk to these mortgage REITs is much smaller than it was in the pandemic. What happened then? All of the preferred shares recovered to trade at least relatively close to $25.00. The ones that had paused dividends repaid all missing dividends and resumed normal payments. Today I want to share one of our latest trades.

On June 20th, 2022, we published an article detailing opportunities to swap between the preferred shares. About a week later, we followed our own article by swapping our AGNCP (AGNCP) for NLY-G. This move continues the sequence of trades between similar preferred shares. To put this in a sequence, we swapped 403 shares of AGNCP for 423 shares of NLY-G, then swapped those shares for 434 shares of AGNCM. We had another 1,185 shares of NLY-G that came from selling part of our position in NRZ. Those shares were also sold to buy more AGNCM.

Source: Seeking Alpha

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